This Month Only! >> $20 off and a FREE SHRM tote with your membership and code TOTE2018!
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
Asia’s expanding markets offer a multitude of financial opportunities—and challenges—for international companies doing business in the region. One such challenge is finding the requisite skills from within the local labor pool to fill positions appropriately and adequately. Thus, many companies look outside the country or region to source candidates. But staffing these open positions with foreign talent can prove to be an expensive proposition, especially if traditional expatriate perquisites are part of the pay plan.
The uncertain economy has employers looking for cost-effective expatriate compensation options. Participants in two surveys by HR consultancy ORC Worldwide—Local-Plus Packages in Hong Kong and Singapore and Survey on Local-Plus Packages for Expatriates in China—report a growing trend toward expatriate “light” or “local-plus” packages.
“These alternative packages often base the assignee’s salary on host-country pay structures,” says Phil Stanley, managing director of ORC Worldwide’s Asia-Pacific region, “but then tack on a few expatriate-type benefits, such as some form of housing assistance and possibly an allowance to partially cover children’s education.”
Employers in different Asian locations address the situation in various ways, depending on the local market and other factors. “For example, while the idea of a local-plus approach in China is popular, and employers are discussing it,” explains Stanley, “in actuality, the concept is still very much a work in progress for most companies. Employers determine much of what they offer on a case-by-case basis. Due to the talent shortages and living challenges in China, we found that most often the local-plus offering is merely a reshuffling of the traditional expatriate assignment package elements.”
When it comes to places like Hong Kong and Singapore, the practice varies. Two-thirds of companies operating in Singapore use local-plus packages for certain situations, compared with half the companies in Hong Kong. “The lower prevalence in Hong Kong may be due to a higher percentage of companies simply offering a pure local package to some expatriates due to higher salary levels and lower tax in Hong Kong,” Stanley says. “When a local-plus package is provided, it is likely to be limited to a local salary and include a cash allowance for housing assistance and placement in the local pension plan—but no other ‘plus’ elements.”
Singapore is a little different, according to Stanley. “There is a higher likelihood that the employer will pay rent directly to the landlord rather than provide a cash housing allowance due to more favorable tax treatment, provide tax preparation help for the first year, cover some dependent education, and provide a cash allowance for pension if the employee is ineligible to participate in the government pension fund,” he says.
Stephen Miller is an online editor/manager for SHRM.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
HR Education in a City Near You
SHRM’s HR Vendor Directory contains over 10,000 companies